Yahoo Finance Helmerich & Payne (HP) Q1 Earnings and Revenues Top Estimates
Helmerich & Payne HP reported fiscal first-quarter 2023 adjusted net income of $1.11 per share, beating the Zacks Consensus Estimate of 81 cents per share. In the year-ago period, the company had incurred a loss of 45 cents per share. The outperformance reflects a significant uptick in activity.
Meanwhile, operating revenues of $719.6 million topped the Zacks Consensus Estimate of $689 million and increased 75.6% from the year-ago level on the back of strong results from the North America Solutions segment. Precisely, sales from the unit totaled $ 627.12 million, well ahead of the consensus mark of $623 million.
In good news for investors, Helmerich & Payne is using the excess cash from a supportive environment to reward investors with dividends and buybacks. As part of this, HP’s board of directors declared a quarterly cash dividend of 25 cents per share to its common shareholders of record on Feb 14. The payout will be made on Feb 28. In addition to the regular dividend, HP declared a supplemental dividend of 23.5 cents per share.
The company also expanded its share repurchase program to include 5 million shares in calendar year 2023, up from 4 million before.
Helmerich & Payne, Inc. Price, Consensus and EPS Surprise
Helmerich & Payne, Inc. price-consensus-eps-surprise-chart | Helmerich & Payne, Inc. Quote
Segmental Performance
North America Solutions: During the quarter, operating revenues of $627.2 million were up 83.9% year over year on higher activity levels, with the average number of active rigs rising from 183 to 188. The steep uptick in drilling works on the back of robust oil and gas prices, together with pricing improvements, meant that the segment turned around from the previous year’s operating loss of $28.9 million to a profit of $145.3 million.
Offshore Gulf of Mexico: Revenues of $35.2 million increased 20% from the year-ago quarter as activity remained robust. Moreover, margins during the October-December period of 2022 expanded more than 10% year over year, resulting in the segment’s profit improving 23.4% (from the prior-year period) to $6.7 million.
International Solutions: In contrast to the prior quarter's operating loss of $0.8 million, this segment saw operating profitability of $1.6 million. In the absence of an $8.1 million impairment charge in the first quarter of fiscal 2023, the increase in operating income was driven by an increase in revenue days and lower expenses, primarily associated with delayed rig mobilizations.
Financial Position
In the reported quarter, Helmerich & Payne spent $96 million on capital programs. As of Dec 31, 2022, the company had $229.2 million in cash and cash equivalents, while long-term debt was $542.9 million (debt-to-capitalization of 16.1).
Guidance
This Tulsa, OK-based company anticipates direct margin in the North America Solutions segment between $280 million and $300 million in the fiscal second quarter. It expects around 183-188 contracted rigs by Mar 31, 2023.
Coming to the Offshore Gulf of Mexico segment, Helmerich & Payne envisions direct margin within $8-$10 million for the fiscal second-quarter.
Additionally, International Solutions’ direct margin is forecast to be between $7 and $10 million for the second quarter.
For the fiscal year, Helmerich & Payne still estimates capital outlay within $425-$475 million, while it hopes to shell out some $400 million as depreciation and $195 million in the form of general and administrative expenses.
Zacks Rank and Other Key Picks
Helmerich & Payne, an American oil and gas well drilling contractor, has operations all over the world. It specializes in drilling oil and gas wells and providing related services to exploration and production companies.
Currently, Helmerich & Payne sports a Zacks Rank #1 (Strong Buy).
Meanwhile, investors interested in the energy sector might look at a few other stocks like ProPetro Holding (PUMP) and Energy Transfer (ET), both sporting a Zacks Rank #1, and Calumet Specialty Products Partners (CLMT) holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ProFrac Holding Corp.: PUMP currently has a forward P/E ratio of 4.26. For comparison, its industry has an average forward P/E of 36.20, which means PUMP is trading at a discount to the group.
ProFrac Holding is worth approximately $1.09 billion. Its shares have decreased by 9.6% in the past year.
Energy Transfer LP: ET is valued at around $41.26 billion. ET delivered an average earnings surprise of 16.34% for the last four quarters, and its current dividend yield is 7.93%.
For the last quarter, Energy Transfer reported earnings of 30 cents per share, in line with the Zacks Consensus Estimate. ET currently pays a dividend of $1.06 per share, or 7.93%, on an annual basis.
Calumet Specialty Products Partners: Calumet Specialty Products Partners is worth approximately $1.33 billion. Its shares have gained 19.5% in the past year.
Calumet Specialty Products Partners is a leading independent producer of high-quality, specialty hydrocarbon products in North America.
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Helmerich & Payne, Inc. (HP) : Free Stock Analysis Report
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